Loyalty programs provide consumers with incentives to shop at certain loyalty program participating facilities, or to show loyalty to a particular merchant, or to a service provider such as a financial institution (e.g., Chase Manhattan Bank). In addition to receiving discounts or financial awards, an incentive to the consumer may include redeemable goods or services, or special recognition of some sort, such as an upgrade to goods or services purchased by the consumer. Often, financial institutions, such as an issuing bank or acquiring bank, provide financial and logistic support to the loyalty program. Loyalty programs may be associated with various transaction payment process programs such as a credit card program, a charge card program, a debit card program, a prepaid card program, or a gift card program.
One indicator of success for any loyalty program is how well it can target consumers that will be positively influenced to participate in the program in exchange for receiving the incentives described by and provided through the loyalty program.
These loyalty programs are typically constructed, marketed, qualified, fulfilled, or refined with limited interaction or collaboration between the various participants of the programs, where the participants may include merchants, financial institutions such as acquirers and issuers, transaction handlers such as credit card companies (i.e., Visa, MasterCard, American Express, etc.), and consumers such as an account holder. For example, a merchant may wish to participate in a co-branded credit card loyalty program (i.e., a Southwest Airlines Chase Manhattan Bank Visa Credit Card). The merchant finds, however, that it will be confined to loyalty program features set solely by the issuing bank (i.e., Chase Manhattan Bank), the features include an overly restrictive credit limit, a conservative bonus mile to purchase ratio, or a limited redemption points option. As such, the merchant will be precluded from finely targeting the merchant's most desired consumers would not be positively influenced to participate in the program in exchange for receiving such limited incentives. The level of loyalty program feature confinement is especially prominent among merchants with a smaller portion of the market who lack influence over the loyalty program and its participants.
A further draw back is that loyalty programs may have limited access to detailed transaction data. For example, some loyalty program participants, such as financial institutions, may rely on their own transaction data records and history to determine the type of incentive to provide to a consumer for conducing one or more transactions. This data history, however, may be limited in scope depending on the degree of transaction specificity that the issuer collects or is able to maintain. Similarly, merchants wishing to set up a loyalty program may solicit financial institutions for transaction data history information, without success in gaining access to the full scope of the transaction data. Even if a merchant gains access to the transaction data, the transaction data may not be in a form the merchant can effectively utilize.
The lack of uniformity in handing transaction data may hamper accurate communication between participants in a loyalty program. For example, acquirers may identify a single merchant differently; one acquirer may identify a merchant by its name and address while another acquirer may identify the same merchant by its name and franchise store number. Similarly, each participant in the loyalty program may be accustomed to processing transaction data in a particular format that may not be the same as the format of another participant of the loyalty program. For example, a merchant that is an airline company may analyze transaction data in units of “frequent flyer program bonus miles per dollar” while an issuer may record dollars spent per month.
Thus, there is a need for a loyalty program having access to detailed transaction data while maintaining a uniform communication protocol between the participants of the program. Further, there is a need for a loyalty program capable of accommodating customizations from its various participants.